HONOLULU — The Department of Commerce and Consumer Affairs Insurance Division released final decisions for 2016 Affordable Care Act (ACA) individual and small group health insurance rates.

Rate changes approved for 2016 vary by plan type. These rates are expected to affect approximately 34,000 individuals currently purchasing health insurance on their own through the ACA marketplace. Small group rates apply to plans for businesses with 50 or fewer full-time employees.

“We were extremely concerned by the requested increases by insurers for 2016 ACA individual plans,” said State Insurance Commissioner Gordon Ito. “Nobody likes to see prices go up for the individual consumer. However, upon close review of the carriers’ expenses, benefits paid, and other considerations our rate analysts and actuaries found premium increases were necessary for the carriers to cover their costs, enabling them to continue to pay their customers’ claims.”

Hawaii law mandates that insurance rates cannot be excessive, inadequate, or unfairly discriminatory. In the case of ACA individual plans, the 2015 rates were inadequate and needed to be adjusted significantly in 2016.

The Hawaii Insurance Division found several reasons for the 2016 rate increases. These factors were “pent up demand” for services sought by previously uninsured individuals, transitional plans and previously low penalties for ignoring ACA’s individual mandate keeping healthy populations out of the marketplace, high cost specialty drugs, and ACA taxes and fees.

A 2015 report by the Centers for Medicare & Medicaid Services shows average Hawaii health premiums for individual ACA plans are among the lowest nationwide. At an average cost of $289.64, before marketplace tax credits or subsidies, Hawaii was the 45th state in terms of average monthly premiums. By contrast, average monthly premiums in the most expensive state to purchase health insurance in were $522.73.

Individuals and small businesses are encouraged to review and understand the offered ACA plans and to check their eligibility for premium tax credits prior to the open enrollment for individuals on Nov. 1, 2015.